Local Law 97 Penalties: What NYC Building Owners Need to Know in 2026

You got a building over 25,000 square feet in NYC? You're covered. Doesn't matter if it's an office tower, a co-op, or a mixed-use building with a bodega on the ground floor. If the total square footage crosses that line, Local Law 97 applies to you.

The first compliance period started in 2024. This isn't coming. It's here. And the penalties are not theoretical. They are real dollar amounts that show up on real invoices.

So What Is Local Law 97, Exactly?

It's part of NYC's Climate Mobilization Act from 2019. The city looked at where its carbon emissions come from and figured out that buildings account for about 70% of all greenhouse gas emissions in New York. Not cars. Not factories. Buildings.

So they went after buildings first. Makes sense when you think about it.

The law sets carbon emissions limits for every building over 25,000 square feet. That's roughly 50,000 buildings across all five boroughs. The goal is to cut building emissions 40% by 2030 and 80% by 2050 compared to 2005 levels.

Who's Actually On the Hook?

The city doesn't care about your tenants' energy habits. The fine goes to whoever's name is on the deed. Not the property manager. Not the tenant running space heaters in July. You.

The 25,000 square foot threshold is for the whole building, not individual units. So if you've got a condo building where no single unit is over 25,000 square feet but the building as a whole is, you're still covered.

Who Gets an Exemption?

There are some carve-outs, but don't get your hopes up:

• City-owned buildings
• Certain affordable housing developments
• Houses of worship
• Industrial facilities already covered by other regulations

The bar for exemption is high. If you're a typical commercial or large residential building owner, assume you're in scope.

The Two Compliance Periods

Here's the part that gets people: the limits get tighter in 2030. A lot tighter.

2024 to 2029: The "Easy" Period

The first period is already active. The limits here are relatively generous. Most buildings that were performing in the top 80% of their category in recent years should be able to squeak by without major capital work.

The limits vary by building type. A typical office building (Group B) has a limit of about 8.46 kg CO2e per square foot per year. Hospitals have a different number. Multifamily is different again.

2030 to 2034: The Real Test

That same office building limit drops to roughly 4.53 kg CO2e per square foot per year. That's nearly a 50% reduction from the first period.

If you're reading this in 2026 and haven't started planning for 2030, you're already behind. Equipment lead times, contractor availability, and permitting all take time. Four years goes fast.

How the Penalties Actually Work

Here's the number that matters: $268 per metric ton of CO2 equivalent over your limit. Every single year.

That's not a one-time slap on the wrist. You pay it annually for every year you exceed your building's cap. Let me put that in real numbers.

A Real-World Example

Say you own a 200,000 square foot office building. Your annual emissions come in at 2,000 metric tons of CO2e, but your limit is 1,600 tons. You're over by 400 tons.

Your annual penalty: 400 x $268 = $107,200 per year.

For larger or less efficient buildings, penalties can easily hit $500,000 or more annually. Some of the city's biggest office towers face potential penalties in the millions.

Filing Deadlines You Can't Miss

The annual reporting deadline is May 1st. Your report covers the previous calendar year. So the May 2026 filing covers your 2025 emissions.

The reporting ties into your existing Local Law 84/133 benchmarking obligations. If you're already filing benchmarking reports (and you better be), LL97 reporting builds on that same data.

Missing the filing deadline is itself a separate violation. The city can hit you with fines for late or missing reports on top of the per-ton carbon penalties. So you could get fined for being over the limit AND fined for not reporting that you're over the limit.

Good Faith Adjustments: There's Some Flexibility

The city isn't completely heartless about this. There's an advisory board that can grant adjustments if you're genuinely trying to comply.

A "good faith" adjustment might be available if you can show you've made real investments in energy efficiency but still can't hit the target because of your building type, a historical designation, or something genuinely outside your control.

But "we didn't get around to it" is not a good faith argument. Neither is "we didn't know about the law." The city has been talking about this since 2019.

Other Compliance Options

• Renewable Energy Certificates (RECs): You can purchase RECs or use clean power purchase agreements to offset some grid emissions. But there are caps on how much you can offset this way.
• Greenhouse gas offsets: Some owners are exploring this, but the city's rules on what qualifies are still evolving. Don't bet your whole strategy on offsets.
• Electrification: Switching from fuel oil or natural gas to heat pumps or electric boilers can dramatically cut your carbon intensity per square foot.

What You Should Be Doing Right Now

If you haven't started, here's your checklist. No excuses.

1. Know Your Numbers

Pull your latest benchmarking report. Calculate your current carbon intensity per square foot. Compare it to both the 2024 and 2030 limits for your building type. Our free compliance checker can do this in seconds.

2. Understand Your EUI

Your Energy Use Intensity score is the foundation of everything. If you don't know what it is or how it works, fix that today. It's the number the city uses to figure out your emissions.

3. Get an Energy Audit

A Level 2 or Level 3 ASHRAE audit will tell you exactly where your biggest opportunities are. Focus on the stuff with the best ROI:

• LED lighting retrofits
• Building management system optimization
• Steam trap replacement
• Envelope improvements (windows, insulation, air sealing)

4. Plan for 2030 Now

The first compliance period is the easy one. If you're barely meeting 2024 limits, you will almost certainly fail the 2030 limits. Start planning capital improvements now. Equipment lead times and contractor availability are real constraints, and they're only going to get worse as more buildings scramble to comply.

5. Talk to Your Utility

Con Edison and National Grid both offer incentive programs for energy efficiency upgrades. These programs can cover 30-70% of project costs for qualifying measures. That's free money sitting on the table.

6. Consider Electrification

If your building runs on fuel oil or natural gas for heating, your carbon intensity is inherently higher. Heat pumps, electric boilers, and other electrification strategies can make a huge difference in your per-square-foot emissions.

How NYC Compares to Other Cities

New York isn't alone in this. Cities across the country are adopting similar building performance standards. Washington DC, Boston, Denver, and Washington State all have their own versions with their own limits, deadlines, and penalty structures.

If you own buildings in multiple cities, you need to track compliance across all of them. Different rules, different metrics, different deadlines. That's exactly what BPS Check is built for: one tool that covers every major BPS law in the country.

The Bottom Line

Local Law 97 is not going away. The penalties are real, the deadlines are firm, and the limits are only getting tighter. The building owners who start planning now will save money. The ones who wait will pay penalties and scramble for contractors when everyone else is doing the same thing.

You know the worst part? The owners who wait always end up paying more for the same work because every contractor in the city is booked solid. Early movers get better pricing, better scheduling, and better results.

The first step is knowing where you stand. Check your building's compliance status today.